Nine House Republicans voted against a bill on Thursday aimed at requiring federal agencies to vet companies seeking funds through small business programs that are exploited by foreign countries of concern, including China.
The legislation, titled the SBIR and STTR Extension Act, passed in a 415-9 vote. All “no” votes came from Republicans — Reps. Andy Biggs (Ariz.), Dan Bishop (N.C.), Mo Brooks (Ala.), Matt Gaetz (Fla.), Marjorie Taylor Greene (Ga.), Thomas Massie (Ky.), Tom McClintock (Calif.), Ralph Norman (S.C.) and Chip Roy (Texas) opposed the measure.
The bill, which passed the Senate by unanimous consent last week and has bipartisan sponsorship, now heads to President Biden’s desk for his signature.
Asked why he voted against the legislation, Gaetz pointed to funding that the Small Business Association has received in the past two years.
“As the Biden administration cripples every facet of our economy, authorizing millions more for SBA is not an essential funding priority,” he added in a statement to The Hill.
The nine Republicans who opposed the measure did not speak during debate on the bill on the House floor Wednesday. The Hill reached out to the lawmakers for comment on their votes.
The measure directs federal agencies with Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs to create a “due diligence program” that would evaluate potential security risks presented by small businesses seeking federal funds.
The due diligence programs would then be mandated to review the financial ties and obligations between the small business requesting federal funds and foreign countries, people or entities. Additionally, the measure calls for the evaluation of the small businesses’ cybersecurity practices, patent analysis, employee analysis and foreign ownerships.
“Agencies shall not make an award if they determine existence of improper business ties to or affiliations with foreign countries of concern, or if agency-supported activities, or national security are deemed to be at risk,” a section-by-section breakdown of the 46-page bill reads.
According to the bill, “foreign country of concern” includes the People’s Republic of China, the Democratic People’s Republic of Korea, the Russian Federation, the Islamic Republic of Iran and other countries determined to be of concern by the secretary of state.
The SBIR and STTR are competitive programs that advocate for small businesses in the U.S. to take part in federal research and research and development, with the possibility of commercializing.
Federal agencies with extramural research and development budgets that surpass a certain level are required to distribute a portion of their funds through the SBIR program and save another chunk for the STTR program.
Even federal agencies currently take part in the SBIR program, according to its website, five of which are also involved with the STTR program.
The legislation sets additional parameters for awarding funds through the SBIR and STTR programs — including barring small businesses that made material application misstatements — and it reauthorizes the two programs in addition to six pilot programs.
They were initially set to expire on Friday, but under the bill will be extended through Sept. 30, 2025.
Passage of the bill comes after a review by the Department of Defense found that China was exploiting the SBIR program. The Wall Street Journal, which reviewed the April 2021 study, reported in May that China was targeting companies that were given funds through the SBIR program with state-sponsored practices.
Sen. Joni Ernst (R-Iowa), a co-sponsor of the bill, referenced The Wall Street Journal article in a statement outlining the legislation.
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